Answer:
The after-tax cost of their 2019 interest expense is $19,040
Explanation:
In order to calculate the after-tax cost of their 2019 interest expense we would have to calculate the following formula:
after-tax cost of their 2019 interest expense=Interest before tax expense-tax
Interest before tax expense=$400,000*7%
Interest before tax expense=$28,000
tax=$28,000*32%
tax=$8,960
after-tax cost of their 2019 interest expense=$28,000-$8,960
after-tax cost of their 2019 interest expense=$19,040
The after-tax cost of their 2019 interest expense is $19,040